TV sets, appliances may cost 3-10% more

Demand for appliances was hit at the onset of the festive season – due to floods in Kerala during Onam and deep discounting by Flipkart and Amazon on Navratri-Dussehra.

Prices of television sets and appliances could go up by 3-10% as early as this week, with manufacturers raising sticker rates to reflect the rupee depreciation and the recent increase in customs levies on imported refrigerators and washing machines.

Companies had originally planned raising prices as early as last month but eventually postponed the move until after the festive-season sales, three senior industry executives said.

The top three brands – LG, Samsung and Sony – have already withdrawn the sales support or subsidy of up to 10% they provided to retail channels, and which went as discount to consumers. Competing brands such as Bosch, Siemens, Haier, Xiaomi and BPL, too, are increasing rates.

“The price hike undertaken in September by some brands is going to get implemented now since brands did not want to effect any price changes during the festive season, and also to provide some cushion to offline retailers to combat the huge online discounting,” said Kamal Nandi, business head at Godrej Appliances and president of industry body, CEAMA.

“It is not possible to cushion prices anymore since margins are badly hit,” Nandi said.

Haier India President Eric Braganza said the company has raised prices by 5-8% this weekend having left them unchanged during the festive season. LG, Samsung and Sony did not respond to e-mailed queries.

Industry executives said while the large brands would typically offer sales support during Diwali, it has never been as deep as 10% offered this year to cover the price increase. The maximum support was offered for the premium range, which would also witness the maximum extent of price increases, they said.

Retailers are concerned. “Brands withdrawing the support may adversely impact demand in these lean months,” said Pulkit Baid, director of eastern India’s leading chain Great Eastern Retail.

The industry said while the rupee has gained in the past few days and oil prices have stabilised, margin pressures remain since companies had last benchmarked costs at Rs 68.5 to the dollar. End-September, the government doubled customs duties on refrigerators, washing machines up to 10 kg capacity, and air-conditioners to 20%, and also increased duties on compressors.

Online exclusive BPL’s COO Manhmohan Ganesh said prices would go up about 10% by next month, with the brand holding back on increases during the festive season since the online marketplace had requested to push sales.

Around a week ago, Xiaomi announced price increases for its televisions by up to Rs 2,000 due to the rupee depreciation.

Gunjan Srivastava, MD at BSH Household Appliances, which sells the Bosch and Siemens ranges in India, said the company is evaluating the price increase.

Top consumer electronics makers reported a good Diwali, with sales growing by 12-15%. Demand was, however, hit at the onset of the festive season – due to floods in Kerala during Onam and deep discounting by Flipkart and Amazon on Navratri-Dussehra.

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